China insurer attacks story on Wen family fortune

A New York Times investigation showing that Chinese Premier Wen Jiabao's family made a fortune from investing in Ping An Insurance after it lobbied him to waive rules requiring a breakup drew a denial from the insurer on Monday.

Without naming the Times, the Ping An Insurance Group said that recent media coverage related to the company had "serious inaccuracies, facts being distorted and taken out of context, as well as flawed logic."

The insurer did not say what the errors were nor did it provide any evidence to challenge the Times' investigation. Public relations company Hill and Knowlton Strategies, which issued Ping An's statement, said it was related to the Times report published Sunday. The report detailed Ping An's lobbying of government officials, including Wen, and how obscure partnerships that concealed the identities of his family members profited by investing in the insurer.

The report was the Times' second describing how Wen relatives amassed assets that the newspaper said were at one point worth $2.7 billion, with share-holdings in Ping An accounting for most of it. Though the Times said it is unclear what if anything Wen knew of his relatives fortune-building, the reports added to Chinese public skepticism about official corruption and favoritism.

In the Sunday report, the newspaper said that Ping An's chairman appealed in a letter in 1999 to Wen, who was then vice-premier, imploring him not to allow the financially troubled company to be broken up, as rules imposed after the Asia financial crisis required. The vice-premier's office was among regulators with the authority to approve the waiver, the report said, citing company documents, government filings and interviews with bankers and former executives.

Ping An, based in the southern Chinese city of Shenzhen, was kept in one piece and later went public on the Hong Kong and Shanghai stock exchanges. It is now China's second biggest insurance company, worth $60 billion. Its top shareholders include European bank HSBC, a Shenzhen state-owned enterprise and other Chinese companies, mostly non-state owned.

Relatives of Wen, using the partnerships rather than holding the investments directly in their names, built up stakes in the insurer that were worth as much as $2.2 billion, the Times reported.

Ping An said it was a "law-abiding" company that complied with rules and regulations and made "factual, comprehensive disclosures and reports on its shareholders and operations." The company vowed to take "appropriate legal action."